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GLOBAL MARKETS-Asian markets stem losses as China returns to work but sentiment jittery

Published 10/02/2020, 02:43 pm
Updated 10/02/2020, 02:49 pm
© Reuters.  GLOBAL MARKETS-Asian markets stem losses as China returns to work but sentiment jittery
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* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Asian shares fall after Friday's losses on Wall Street

* Chinese authorities make plans for businesses, schools to reopen

* Singapore raises alert level on China travel

By Swati Pandey

SYDNEY, Feb 10 (Reuters) - Asian shares pared early losses on Monday as Chinese authorities lifted some coronavirus-related restrictions on work and travel, helping businesses resume work though overall sentiment was still jittery as the death toll from the epidemic climbed.

More than 900 people have so far died in China's central Hubei province as of Sunday with most of the new deaths in the provincial capital of Wuhan, the epicentre of the outbreak. contain the spread, China's government had ordered lockdowns, cancelled flights and shut schools in many cities. But on Monday, workers began trickling back to offices and factories though a large number of workplaces remain closed and many white-collar workers will continue to work from home. broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS reversed some of its early losses to be down 0.5%. Japan's Nikkei .N225 was off 0.4%, after earlier stumbling more than 0.8% while Australia's benchmark index .AXJO was down a tad.

China's indexes were the only ones in the black in Asia with the blue-chip index .CSI300 adding 0.4% and Shanghai's SSE (LON:SSE) Composite .SSEC up 0.3%.

"Markets have turned around a bit reflecting the news that Chinese businesses were returning to work," said James McGlew, analyst at stockbroker Argonaut.

"Overall, I think, there is still a concern out there that the impact from the coronavirus hasn't been fully quantified," he added.

"Today's (easing of restrictions) seems to be more of a symbolic gesture rather than the government actually being on top of the situation with this virus."

The outbreak has killed more people than the SARS epidemic did globally in 2002/2003. The virus has also spread to at least 27 countries and territories, infecting more than 330 people.

Over the weekend, an American hospitalised in the central city of Wuhan became the first confirmed non-Chinese victim of the virus. A Japanese man who also died there was another suspected victim.

Monday's losses in Asia extended from Wall Street on Friday where the Dow .DJI fell 0.9%, the S&P 500 .SPX declined 0.5% while the Nasdaq .IXIC dropped 0.5%. E-mini futures for S&P 500 ESc1 reversed early losses on Monday to be up 0.1%.

"Expect markets to be sensitive to virus headlines. In this environment, we favour defensive positioning," ANZ economists wrote in a note.

China's central bank has taken a raft of measures to support the economy, including reducing interest rates and flushing the market with liquidity. From Monday, it will provide special funds for banks to re-lend to businesses working to combat the virus.

Despite the measures, analysts expect the world economy to take a hit from an expected slowdown in China.

"For now, our best guess is that the economic disruption related to the coronavirus will cost the world economy over $280 billion in the first quarter of this year," Capital Economics said in a note on Friday.

"If we're right, then this will mean that global (economic output) will not grow in q/q terms for the first time since 2009."

The virus has overshadowed other market news with better-than-expected U.S. jobs data on Friday failing to lift sentiment.

Non-farm payrolls increased by 225,000 jobs in January, with employment at construction sites increasing by the most in a year amid milder-than-normal temperatures, the Labor Department said. zone bond yields fell after German industrial output tumbled in December to notch its biggest fall since January 2009, fanning concerns about the bloc's biggest economy.

The euro EUR= staged a half-hearted bounce from four-month lows to be last at $1.0953.

The dollar reversed losses against the yen to be up 0.1% at 109.84. JPY=

The Australian dollar AUD=D3 , considered a liquid proxy for China plays, also jumped 0.5% to $0.6706 after briefly hitting an 11-year low of $0.6679. It fell 0.2% last week to clock its six straight weekly loss.

That left the dollar index .DXY flat at 98.647.

In commodities, brent crude LCOc1 futures gave up losses to be up 17 cents at $54.64 a barrel while U.S. crude CLc1 futures added 8 cents to $50.4 a barrel.

Since Jan. 17, oil prices have fallen by 14% while copper has is down around 10%.

U.S. gold futures GCv1 were flat at $1,573.3 an ounce.

https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations

https://tmsnrt.rs/2Dr2BQA

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Sam Holmes)

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